Speaking at the ADMA Data Day, Lloyds UK's head of customer insights and interaction talks through how the banking group is transforming the way it makes decisions based on a new customer engagement framework

The future for businesses is in customer insights and utilising data intelligence to fuel innovation and development, Lloyd Banking Group’s UK lead for interaction claims.

Speaking at the ADMA Data Day in Sydney on 10 April, the banking giant’s director of customer insights and interaction, Sergio Vieira, told attendees that the days of relying on product or business intelligence to inform decisions is over.

“In the past, the majority of banks used to get product insights, then it moved to business insights. The future is about using customers as the starting point,” he said. “From there, you can determine the business response and get the right outcome.

“There has also been a big focus on profitability, but you end up with a reputational problem. We are trying to now build customer trust by putting them at the heart of decisions, using data-driven insights, and create a win/win/win for us, our customers, and our shareholders.”

Vieira talked through how Lloyds Banking Group is looking to become more customer-centric by utilising data and process, and explained how the organisation devised and rolled out a new customer engagement framework last year to help meet this objective. It looked to behavioural economics to understand how to go about it.

One of the big challenges UK banking institutions face is the lack of trust consumers have in their brands thanks to the financial crisis, and mistakes they made in the past, Vieira said. He also pointed out just 40 per cent of the UK population buy from the main banking providers, which is why banks like
Lloyds are investing in data to understand more about their customers and pain points.

“Building trust is much more difficult than getting it in the first place,” he admitted. “All of this has challenged our business model.

“What we’re trying to do around the decisions we are making is to ask: Are they taking the customer outcomes into consideration? Are they the right decisions from a customer point of view? Or are we ‘trapping’ them, using customer inertia to make a profit?”

A cornerstone of Lloyd’s new customer approach was to create an independent strategy and partnering team. This creates a bridge between the insights being delivered through data, and the rest of the organisation, Vieira said. The team’s responsibilities include research, insights, interactions and delivery.

In an interview with CMO after his presentation, Vieira said it was important to have a dedicated customer insights team.

“You shouldn’t rely on a channel or product line; customer strategy should be independent,” he said. “It’s the people in the function that really matter and they have to be independent.”

Other core components in better customer engagement are governance and strategy, audit
management, the flexibility to tackle opportunities identified and reduce its time to market with activities; optimising opportunities to contact customers; and improving delivery through multivariable systems and channels.

Personalisation of campaigns and communications through all channels to be more relevant to the customer was also key, Vieira said.

“As well as a framework and flexible approach to campaign targeting, we have created ‘triggers’, which represent customer need and are all generated as data points,” he continued. “This allows us to create campaigns integrating these data points. The trigger and proposition then give us the opportunity to sell products and services in all channels, act on the activity that follows and generate an outcome.”

Optimisation tools and technology are vital in the mix, but what it ultimately comes down to is changing the internal decision-making process.

Vieira said the organisation used to ask questions based on hypotheses generated within the business. “This meant we weren’t focusing on customers in the first place,” he said. “Today, we… work with the technical teams to try and provide a solution built for the customer, not from a business perspective.”

Measurements Lloyds uses to gauge the impact of its activities and the perception of services include customer relevancy, income and Net Promoter Score. Vieira said it’s also important to look at the constraints on achieving success such as contact rules, budgets, channel capacity, mandatory requirements and digital and branch staff.

While it’s early days, Vieira cited improvements in product accuracy and quality of communication, adding the insights team are driving results that are 2.75 times better than those achieved through its former market approach.

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